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Judge refuses to revive GM racketeering suit vs. FCA

Robert Snell Kalea Hall
The Detroit News

Detroit — New allegations that Fiat Chrysler Automobiles NV executives bribed United Auto Workers officials with tens of millions of dollars stashed in secret offshore bank accounts is "too speculative" and do not warrant reinstating a federal lawsuit, a judge said Friday.

U.S. District Judge Paul Borman issued the order one week after General Motors Co. leveled new allegations — without offering any proof — that a list of UAW leaders, including retired President Ron Gettelfinger, pocketed bribes funneled through foreign bank accounts. FCA has denied the allegations.

The Renaissance Center, headquarters for General Motors, along the Detroit skyline from the Detroit River.

GM cited the accounts in asking Borman to reinstate a civil racketeering lawsuit that pitted two automakers in a bitter fight involving bribes and a pattern of wrongdoing GM said was aimed at corrupting the collective bargaining process and saddling the Detroit automaker with higher labor costs. GM also accused Borman of committing legal errors in dismissing the lawsuit last month.

There was no clear legal error, Borman wrote Friday, adding: "... and GM’s newly discovered evidence is too speculative to warrant reopening this case."

GM will appeal to the U.S. 6th Circuit in Ohio, company spokesman David Caldwell said in a statement: "Today’s decision is disappointing, as the corruption in this case is proven given the many guilty pleas from the ongoing federal investigation. GM’s suit will continue — we will not accept corruption."

Affidavits signed by GM’s lawyers alleging Fiat Chrysler executives used bank accounts and “paid moles” inside GM to further a bribery scheme “do very little to corroborate this theory,” the judge wrote.

“Even if the affidavits establish that these foreign bank accounts exist, that fact does not rise to the inference advanced by GM, that FCA was more-than-likely using the bank accounts to bribe UAW officials,” Borman wrote.

GM also pointed to nearly 30-year-old allegations about how FCA’s predecessor, Fiat SpA, used foreign bank accounts to bribe politicians.

“The existence of foreign bank accounts, and an almost-thirty-year-old scandal do not, however, move GM’s claims over the line from speculative or conceivable to plausible,” the judge wrote.

​FCA's lawyers denied the bribery allegations.

"Judge Borman’s ruling this morning," the Italian American automaker said in a statement, "once again confirms what we have said from the beginning — that GM’s lawsuit is meritless — and its attempt to submit an amended complaint under the guise of asking the court to change its mind was nothing more than a baseless attempt to smear a competitor that is winning in the marketplace.” 

A lawyer for former FCA Vice President Alphons Iacobelli, who is accused of controlling offshore funds, called the claims baseless and "scurrilous."

Iacobelli lawyer Michael Nedelman likened the conduct of GM's legal team to the late Sen. Joseph McCarthy, who claimed to have a list of government employees who belonged to the Communist party in the 1950s.

Borman dismissed the case last month that accused Fiat Chrysler's late CEO, Sergio Marchionne, of orchestrating a bribery conspiracy to corrupt three rounds of bargaining with the UAW. The conspiracy was designed to harm and take over Detroit's largest automaker, according to the lawsuit, which said GM lost "billions" of dollars.

Gettelfinger, who retired in 2010, released a statement through the UAW saying he read the allegations "with disgust and dismay" and faulted GM "for their malicious and utterly baseless attack against me and a supposed 'unnamed' member of my family."

rsnell@detroitnews.com

Twitter: @robertsnellnews